Some couples don’t need a financial adviser. That’s because one of the partners has the desire, time and expertise to do the work that other couples (and individuals) outsource to professionals.
Yet in my 25 years of experience as a financial adviser, it’s been rare that I’ve encountered a scenario where both partners each could handle the family’s finances without the assistance of a professional.
In most mature marriages today (people over the age of 50), regardless of which spouse pays the bills, it is still usually the husband who makes the investment decisions.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Yet the reality is that, in most marriages, the husband will die before the wife.
So what happens to the widow (or the husband) who is left to deal with the financial matters? If she was the one who handled the affairs, or at least took part in the process, she’ll probably do just fine. But if she relied upon her husband to manage the investments, she’ll probably have to find a financial adviser to assist her – precisely at a time in life when everything seems uncertain.
I’ve noticed during my career that, for those couples who both have a relationship with the family financial adviser, the surviving spouse handles this incredibly difficult transition with much less stress than those people who have no relationship with an adviser. That’s because they don’t have to worry as much about their finances because they know they have someone who has their interests at heart.
If you are married and you manage your family’s finances, ask yourself the following question: “How would my spouse go about managing our investments if I were to die”?
If you have a high degree of confidence that your spouse could continue managing things on her (or his) own, that’s excellent! But, if not, you really ought to take some steps to prepare for the inevitable.
There are two things you should do: First, try to involve your spouse with the process. Talk with her (or him) about the decisions you are making and seek her (or his) involvement in selecting the investments.
If you find your spouse is receptive and truly interested in learning how to take care of the family’s portfolio, without the help of an adviser, great. But if not, consider what many others in your situation have done – develop a relationship with a financial adviser as soon as possible.We’ve had many people come to us over the years who became clients of the firm for the sole purpose of taking care of their spouse. They realize that if they can introduce their spouse to an adviser beforehand, and spend the time with the adviser so that their spouse knows and trusts that person, it will be one less thing their spouse will need to deal with when they pass away.
The benefit to the spouse is that she (or he) has someone to lean on during the immediate aftermath, as well as the years ahead.So if you are a person who takes pride in doing a fine job managing the investments, stop and think what it might be like for your spouse if you were gone. You might consider it worthwhile to find an adviser your spouse can trust well before you are gone so that she (or he) can feel confident about their finances in the event of your demise.
Scott Hanson, CFP, answers your questions on a variety of topics and also co-hosts a weekly call-in radio program. Visit MoneyMatters.com to ask a question or to hear his show. Follow him on Twitter at @scotthansoncfp.
-
Stock Market Today: Have We Seen the Bottom for Stocks?Solid first-quarter earnings suggest fundamentals remain solid, and recent price action is encouraging too.
-
Is the GOP Secretly Planning to Raise Taxes on the Rich?Tax Reform As high-stakes tax reform talks resume on Capitol Hill, questions are swirling about what Republicans and President Trump will do.
-
Social Security Is Taxable, But There Are WorkaroundsIf you're strategic about your retirement account withdrawals, you can potentially minimize the taxes you'll pay on your Social Security benefits.
-
Serious Medical Diagnosis? Four Financial Steps to TakeA serious medical diagnosis calls for updates of your financial, health care and estate plans as well as open conversations with those who'll fulfill your wishes.
-
To Stay on Track for Retirement, Consider Doing ThisWriting down your retirement and income plan in an investment policy statement can help you resist letting a bear market upend your retirement.
-
How to Make Changing Interest Rates Work for Your RetirementHigher (or lower) rates can be painful in some ways and helpful in others. The key is being prepared to take advantage of the situation.
-
Within Five Years of Retirement? Five Things to Do NowIf you're retiring in the next five years, your to-do list should contain some financial planning and, according to current retirees, a few life goals, too.
-
The Home Stretch: Seven Essential Steps for Pre-RetireesThe decade before retirement is the home stretch in the race to quit work — but there are crucial financial decisions to make before you reach the finish line.
-
Three Options for Retirees With Concentrated Stock PositionsIf a significant chunk of your portfolio is tied up in a single stock, you'll need to make sure it won't disrupt your retirement and legacy goals. Here's how.
-
Four Reasons It May Be Time to Shop for New InsuranceYou may be unhappy with your insurance for any number of reasons, so once you've decided to shop, what is appropriate (or inappropriate) timing?
